HASH Simply Solventless Concentrates Ltd

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CALGARY, AB, Aug. 15, 2024 /CNW/ - Simply Solventless Concentrates Ltd. (TSXV: HASH) ("SSC") is pleased to announce its Q2 2024 results, including record gross revenue of $4,232,663, record EBITDA of $1,282,696¹ (adjusted EBITDA of $952,986), record net income of $1,220,708 (normalized net income of $890,725), and annualized net income of $0.096 per share. All Q2 2024 results exceed the Q2 2024 guidance provided by SSC in its news release dated May 27, 2024. The information set out in this press release should be read in conjunction with SSC's financial statements as at and for the three and six months ended June 30, 2024 and the related management's discussion and analysis, which are available for review on SSC's SEDAR+ profile at www.sedarplus.ca.

Jeff Swainson, President & CEO of SSC, stated: "SSC has established a track record of revenue growth and profitability which has resulted in strong strategic positioning within the Canadian cannabis industry. We will seek to continue to leverage this positioning to capitalize on opportunities resulting from industry headwinds, and to finish the second half of 2024 stronger than the first half."

Mr. Swainson added: "Our team is doing a fantastic job integrating CannMart Inc. into our operations as planned. Revenue growth is being fuelled by the proceeds of our recent over subscribed $3.85 million financing, and we are capitalizing on synergies and cost reductions with CannMart which are expected to drive profitability. We will provide Q3 2024 guidance in the coming weeks; however, on a preliminary basis, we are projecting Q3 2024 annualized gross revenue of approximately $27.0 million ($0.40/share), September 2024 annualized gross revenue of approximately $33.0 million ($0.45/share), Q4 2024 annualized gross revenue of approximately $37.0 million ($0.50/share), and December 2024 annualized gross revenue of approximately $42.0 million ($0.55/share), up from our record $16.8 million of annualized gross revenue achieved in Q2 2024."  

Q2 2024 Financial Highlights:

• Q2 2024 Net Income per Share (EPS): $0.024 (Q1 2024 - $0.01), an increase of 140%.
• Q2 2024 Annualized Net Income per Share (EPS): $0.096 (Q1 2024 - $0.04), an increase of 140%.
• Q2 2024 Cash Flow from Operations Before Working Capital Changes: $952,896 (Q1 2024 - $610,843), an increase of 56%.
• Q2 2024 Gross Revenue: $4,232,663 (Q1 2024 - $3,122,232), increase of 36%.
• Q2 2024 Net Revenue: $2,902,206 (Q1 2024 - $2,298,273), an increase of 26%.
• Q2 2024 Gross Margin: $1,720,920 (Q1 2024 - $1,117,387), an increase of 54%.
• Q2 2024 Gross Margin Percentage: 59% of net revenue (Q1 2024 – 49%), an increase of 20%.
• Q2 2024 EBITDA: $1,282,969 (Q1 2024 - $567,602), an increase of 126%. See TABLE 1 below. 
• Q2 2024 Adjusted EBITDA: $952,986 (Q1 2024 - $611,571), an increase of 56%.
• Q2 2024 Net Income: $1,220,798 (Q1 2024 - $502,536), an increase of 143%.
• Q2 2024 Normalized Net Income⁽¹⁾: $890,815 (Q1 2024 - $546,505), an increase of 63%. 
• Q2 2024 Working Capital⁽¹⁾: 5,909,655 (Q1 2024 - $4,233,711), an increase of 40%.
• Q2 2024 Inventory Turnover: 0.48x (Q1 2024 – 0.50x). Expected Q3 2024 inventory turnover of 0.70x and expected Q4 2024 inventory turnover of 1.00x, reflecting planned increases in revenue. 
• Q2 2024 Current Ratio: 1.74 (Q1 2024 – 1.64), an improvement of 6%.
• Q2 2024 Financing: On April 17, 2024, SSC issued 5,333,334 units at a price of $0.15 per unit for net proceeds of $800,000. See the following news release dated April 17, 2024 for details: OVER SUBSCRIBED $800,000 UNIT FINANCING, which is also available on SSC's SEDAR+ profile at www.sedarplus.ca.
• CannMart Services & Acquisition Agreements: On June 24, 2024, SSC entered into services and acquisition agreements regarding the operating and acquisition of CannMart Inc.  See the following news release dated June 25, 2024  for details of this transaction:  CANNMART SERVICES & ACQUISITION AGREEMENTS, which is also available on SSC's SEDAR+ profile at www.sedarplus.ca.
• Q3 2024 Financing: On July 17, 2024, SSC issued 15,400,000 units at a price of $0.25 per unit for gross proceeds of $3,850,000. See the following news release dated July 17, 2024 for details: OVER SUBSCRIBED $3,850,000 UNIT FINANCING, which is also available on SSC's SEDAR+ profile at www.sedarplus.ca.
• Warrant Exercises: Subsequent to Q2 2024 up until August 14, 2024, 3,311,959 common share purchase warrants of SSC have been exercised at $0.20 per warrant for proceeds of $662,392.

Please see TABLE 1 below for a summary of SSC's quarterly EBITDA, adjusted EBITDA, net income, and normalized net income since SSC received its Health Canada licenses:

The financial information in this press release has been reviewed and approved by the board of directors of SSC.

Option Grant

SSC has made its annual grant of incentive stock options to employees, management, and its board of directors. A total of 2,816,000[2] stock options were granted at an exercise price of $0.37 per share and the options expire on August 14, 2027. The option grant remains subject to the final approval of the TSX Venture Exchange.

About Simply Solventless Concentrates Ltd.

SSC is a public company incorporated under the Business Corporations Act (Alberta). SSC's mission is to provide pure, potent, terpene-rich ready to consume cannabis products to discerning cannabis consumers. For more information regarding SSC, please see www.simplysolventless.ca.

Notice on Forward Looking Information

This press release contains forward-looking statements and forward-looking information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "will", "estimates", "believes", "intends", "expects", "projected" and similar expressions which are intended to identify forward-looking statements. More particularly and without limitation, this press release contains forward looking statements concerning capitalizing on opportunities resulting from industry headwinds, finishing the second half of 2024 stronger than the first half of 2024, synergies and cost reductions with CannMart driving profitability, and providing Q3 2024 guidance. SSC cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, assumptions and expectations, many of which are beyond the control of SSC, including expectations and assumptions concerning SSC, the ability to realize expected revenue and cost synergies of the transactions with CannMart Inc. on the timelines expected, the risk that the business of CannMart will not be integrated successfully, the ability to maintain relationships with customers, employees and suppliers, the timing and market acceptance of products, competition in SSC's markets, SSC's reliance on customers, fluctuations in interest rates, SSC's ability to maintain good relations with its customers, employees and other stakeholders, changes in law or regulations, SSC's ability to protect its intellectual property, as well as other risks and uncertainties, including those described in SSC's filings available on SEDAR+ at www.sedarplus.ca. The reader is cautioned that assumptions used in the preparation of any forward-looking statements may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of SSC.

The reader is cautioned not to place undue reliance on any forward-looking statements. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are made as of the date of this press release, and SSC does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

Non-IFRS Financial Measures

This press release includes references to "Working Capital", "EBITDA", "Adjusted EBITDA" and "Normalized Net Income", which are not defined under International Financial Reporting Standards (IFRS). The intent of these non-IFRS measures is to provide additional useful information to investors and analysts. These non-IFRS measures do not have a standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other entities. As such, these non-IFRS measures should not be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS.

Working Capital is defined as current assets less current liabilities as reported on SSC's consolidated statements of financial position. Working Capital is considered as a useful measure by management of SSC to indicate SSC's ability to service its short-term financial obligations with short-term assets.

EBITDA is calculated as income before interest, taxes, depreciation and amortization expenses. EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of capital structure, taxation and depreciation, but may not be appropriate for other purposes.

Adjusted EBITDA is calculated as EBITDA less the sale of SSC's facility and settlement payment(s), plus the acquisition of Dash Capital Corp. and share compensation expense. Adjusted EBITDA is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items.

Normalized Net Income is calculated as income less the sale of SSC's facility and settlement payment(s), plus the acquisition of Dash Capital Corp. and share compensation expense. Normalized Net Income is considered as a useful measure by management of SSC to understand the profitability of SSC excluding the effects of certain non-operating items.

The following table reconciles current assets and current liabilities to Working Capital:

The following table reconciles net income (loss) to EBITDA:

The following table reconciles net income (loss) to Adjusted EBITDA:

The following table reconciles net income (loss) to Normalized Net Income:

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE Simply Solventless Concentrates Ltd.